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tv   60 Minutes on CNBC  CNBC  July 3, 2012 9:00pm-10:00pm EDT

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[ticking] >> i make money. nothing wrong with it. that's what i want to do. that's what i'm here to do. that's what i enjoy. >> you tell me you're a shareholder activist. >> i don't say--the name is the same. an activist is the same as a raider, you know. they call it whatever you want. rose by any other name. >> so you haven't changed? >> i haven't changed at all. not one iota. [ticking] >> eli and your lovely wife right here please. >> eli broad may be very rich, but he says he wants to die poor. to achieve that, he gives money away by the bucket load. half a billion dollars so far to los angeles, to disney hall, the l.a. opera, the museum of contemporary art, three scientific research centers, and he puts his name on almost all of them. you want the world to know about
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it by putting your name on all the things you do support. >> i don't keep it a secret, that's for sure. [ticking] >> wsonytronics giant that's the epitome of japan incorporated, lost its cutting edge, it did something radical. it hired a westerner, sir howard stringer, as its new ceo. sony is no longer the coolest. this is the coolest. >> you can take ipod and beat us over the head with it, but it's only one product, and we have 1,000 products. >> still, talk about a tough job. he has to turn sony around in a culture that's not always easy for a westerner to understand. >> sorry. >> that's all right. were you lost in translation too? >> welcome to 60 minutes on cnbc. i'm steve kroft. in this edition, we talk with a trio of business moguls, carl icahn, eli broad, and sir howard stringer. we begin with carl icahn. it takes a certain breed of stock market investor to thrive
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in queasy times, and icahn is one of that breed. he has a knack of turning someone else's loss into profit for himself. but he can also help others improve their bottom line through the so-called icahn lift, an upward bounce that often happens when he starts buying a beleaguered stock. when the financial crisis hit in 2008, many investors were tearing their hair out, but not icahn. the state of the economy changes, but icahn's investment philosophy remains the same. as he told leslie stahl in march of 2008, carl icahn looks to pounce while everyone else is losing their shirts. >> the day we visited icahn enterprises, the stock market was swinging wildly, at one point, dropping 300 points. so has this been a bad day? this is not a great day. >> tough day, tough day. >> wow, this is beautiful. look at your view. icahn works in a skyscraper suite overlooking new york's central park. >> i think i lost today. >> you did? >> yeah.
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>> actually, he lost big. well over $150 million that one afternoon. but when we spoke with him a few days later, icahn told me, "no big deal." he lives by the mogul's credo: never let 'em see you sweat. >> i was buying that day. i mean, seriously, i was very happy about that. >> you looked like you were-- >> i'm not-- >> frazzled and--'cause you were-- >> well, i'm always frazzled. i mean, i look good now-- i combed my hair-- but i'm always--got so much going on, and i enjoy that. [bell clanging] >> one of his biggest holdings, motorola, plunged 19% that day. but icahn, the ultimate risk taker, was gobbling up more shares in the company. motorola is a perfect example of how carl icahn operates. first he chooses a company he thinks is poorly run and trading below value. two years ago, he started buying up millions of shares of motorola. now he controls over $1 billion worth of stock. as he usually does, he's been making demands in order to jolt
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up the sagging stock price. first one: dump the ceo that happened in december. then break up the company. his goal is always the same: to reap a hefty profit for himself. he's been successful, say wall streeters, because he's intimidating and relentless. >> with me, i think, generally, they take the attitude, "try to make peace. try to work with him because he's not going away. >> is it 'cause you just have so much money? >> well, and they know my nature. it's--they know i'm not-- >> what's your nature? >> that i'm not going away. that i'm obsessive guy. that i'm coming in here. i've done it, and there's no way that i'm leaving until they do something. that's eminently refinanceable. >> he's been hunting down vulnerable corporate prey since the 1980s, when he was reviled as a black hat corporate raider. why does everybody say that you're the man everybody loves to hate? >> love to hate? well, you're hurting my feelings. >> that's me interviewing him in
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1986 after he took over twa. >> carl icahn unfair to flight attendants. >> he was seen as ruthless because he fired people, slashed salaries, cut routes... >> the management of twa--it's true--should have done this a long time ago. >> and as the company went into bankruptcy, siphoned off money for himself. >> i own it. it's my money. i worry about the bottom line, because if i lose, you know, i'm answerable to my bank account. >> back then, when icahn targeted a company, management would often pay him so-called "greenmail" just to go away, but that kind of shakedown isn't tolerated anymore. >> ladies and gentlemen, carl icahn. >> today he's called an activist because when he targets a company and makes money, so do the other shareholders, the icahn lift. >> last year, year and a half, the stocks that we became activists in, their values went up $55 billion. >> another success came when software giant oracle bought
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it's competitor, bea systems. >> i just figured it out. >> icahn, a major stockholder in bea, coerced oracle into raising its bid. how much did you make? >> about $300 million. [chuckling] but i took a risk. i mean, i took a risk. but, hey, how 'bout the other shareholders? all of the shareholders--if you add up what they made, you're talking $2 billion, $3 billion the shareholders made. thank you. [ticking] it's a sad commentary. >> coming up: carl icahn's favorite target: ceos. >> they give them all this money for doing a terrible job. and for my way of looking at it, why? >> you do seem to have special contempt for ceos as a category, as a group. >> we're gonna be run by morons, right? >> when 60 minutes on cnbc returns. [ male announcer ] summer is here.
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>> in march of 2008, with the economy in decline, famed corporate raider carl icahn talked with leslie stahl. he was on a crusade to make american business more competitive. as he saw it, u.s. corporations were losing their edge due to bloated bureaucracies and rampant waste. >> there were very few companies i couldn't go into--and i'm not a manager-- and knock off 30% of cost, just cost of waste. just waste. now why is that a problem? because that's why--one of the problems in our competing-- this is the specter coming because we can't compete with asia, and we still walk around with our head in the sand. it's a sad commentary. >> he gets really worked up over fat ceo paychecks and bonuses even when the company loses money. they give them all this money for doing a terrible job. and from my way of looking at it, why? >> you do seem to have special contempt for ceos as a category, as a group. >> we're gonna be run by morons,
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right? okay. i have no contempt for them. they're-- >> well, you don't have cont-- >> they have responsibilities. >> you've called them morons. what do you mean, you-- >> no, no. you know, that is unfair. >> you did--you have-- >> i have a metaphor that the guy that gets in the company. he moves up the ladder. he's like the fraternity president in college. he's the guy that you like. he's always there when you need a buddy. he doesn't make waves. you never know what-- you can't ever figure out when he's studying because he's always at the eating club with the fraternity when you go over there. and that's the guy that moves up the ladder in the corporate world. >> you really think that's who becomes the ceo? >> in many cases, absolutely. now, are there great ceos? yes. i mean, i want to make it clear. there are a lot of exceptions. >> he says, too often, boards of directors don't hold management's feet to the fire, so other investors often call on him to step in. >> hey, i get calls all day from smart guys, hedge funds that will come call, "why don't
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you look at this one?" i'm sort of the guy in school that the other guy goes to and says, "why don't you beat that guy up," you know? >> he loves a good fight, no doubt about it. i'm looking as i'm walking along here, all your paintings are battle paintings. many a ceo has passed these bloody scenes of a warrior vanquishing his enemies as they head to a meeting with icahn. "does it tell me something about you?" is what i'm trying to figure out. >> not really. it sends a slight message to people who come. >> with the sword in the hand? >> yeah. >> even as a kid, his mother said he was like genghis khan. he was an only child growing up during the depression in far rockaway, part of queens, new york. >> my father said, "son, look, you have no talent really." i said, "well, thanks, dad. thanks for making me feel good about that." >> clearly mr. icahn didn't get his son, who was smart and ambitious. carl got into princeton and paid for half his tuition with his winnings at the poker table. >> i was always very good, if you call it--i don't know if you
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call it talent or whatever. i was always good at making money. >> was her ever. he's said to be worth $14 billion. >> do you live a glamorous life? >> i'd say no. >> absolutely not. >> he's married to gail golden, his second wife and former assistant. >> how you doing? >> because he is such a workaholic, gail says they have little time to enjoy the money he's made. >> do you have a yacht? >> we have a yacht, but we don't use it much. >> you don't have a lot of houses? >> yeah, we do, but we don't go. >> [chuckles] >> can she have anything she wants? >> she takes it. she don't ask me, you know? i have no idea what she buys. >> but why do you care? >> well, you know, i just don't--i wouldn't like somebody just frittering away money. i mean, it still means something to me. i'm a kid from far rockaway. i still would not-- >> you have $14 billion, and she wants to go-- >> well, you say i've got $14 billion. i never said it. >> so how do they spend their money? more and more on philanthropy, like building this track and field stadium for the school
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children of new york city. >> raise your hand. >> and building two charter schools in poor neighborhoods in the bronx. these are overseen by icahn's foundations, which gail runs. >> call them just to make sure. >> she works in the office, and so does his son. >> that's my son. >> brett, an analyst at the icahn firm, plays chess with his dad on the weekends, for money, of course, and recently, brett began winning. >> beat the hell out of me. tell 'em how you beat the hell out of me. >> no, no. he's too good. he's too good. he just says that 'cause he wants to get odds. >> that's bull. he beats me. >> i heard that you went out and hired somebody to teach you to play better so you can beat him again. >> well, i got a grandmaster. >> icahn, along with his son and 40 other analysts and lawyers in the firm, work long hours looking for more companies to target. >> and these guys do a great job. somebody left. i don't know who that is. i'll find out. >> they also work on icahn's hedge fund. >> keep working. that's good.
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>> after the fund had been averaging gains of 30% a year, it slid to just 7% in 2007. has anybody questioned whether, since you didn't do so well last year, whether you're losing it? losing the touch? >> nobody calls me. they don't call me. i don't know if-- >> can we read anything, though, into just 7%? >> some years, you're gonna make 70%. some years, you're gonna make 7%. you should always do better than the market, and you shouldn't lose. >> one of the big raps against you is that what carl icahn wants to do is go in and get a fast, quick profit out of the company, and he doesn't think down the road. >> yeah, but i can only talk facts. in every company we've gone into that we get control, we've put millions and millions of dollars into them. >> it's true. sometimes he takes over bankrupt companies like a chain of nevada casinos, puts millions into them, and turns them around. but more often, he buys up a stock, agitates to get the price
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--thft-- and gets out. >> i make money. nothing wrong with that. that's what i want to do. that's what i'm here to do. that's what i enjoy. >> today you tell me you're a shareholder activist. >> i don't say--the name is the same. an activist is the same as a raider, you know. they call it whatever you want. rose by any other name. >> so you haven't changed? >> i haven't changed at all. not one iota. i'm still doing the same thing. i go in, buy a lot of stock in an undervalued company. it helps the other shareholders a great deal. but i'm not putting myself in a cloak and saying, "oh, shareholders, you know, i'm doing a great job for you." i'm saying-- >> so you don't do it for the other shareholders. you do it for you, but it does happen to raise all the boats. >> it helps--it helps the shareholders immensely. >> in january 2011, motorola was split into two companies: motorola mobility and motorola solutions. seven months later, motorola mobility agreed to be purchased by google for $12.5 billion. carl icahn says the deal is a vindication of his investment
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and efforts to split up the company. but even carl icahn isn't completely recession proof. since our report first aired in 2008, icahn's fortune has dipped a little from its then-reported $14 billion. in 2011, forbes magazine estimated icahn's net worth at $13 billion, making him the 25th richest person in america. [ticking] coming up: the billionaire philanthropist changing the culture of los angeles. >> you've said that your sense of being a wealthy man actually increased the more you gave money away. >> i think it's true. i don't feel i'm here to just maintain the status quo. i'm here to make things better or different. >> meet eli broad when 60 minutes on cnbc returns.
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and without a line. now that's a fast car. it's just another way you'll be traveling at the speed of hertz. [ticking] >> in this era of belt-tightening, it's kind of refreshing to take a look at people whose favorite pastime is giving money away. such a man is eli broad, a self-made billionaire who is one of the most generous philanthropists in america. along with supporting education reform, medical research, and the arts, he also wants to transform los angeles into a cultural capitol. eli broad likes to think big, but some of his critics say he can act very small. as he told morley safer in april 2011, eli broad doesn't really care what anyone says. all he wants to do is die poor. well, relatively poor. >> i believe in two things: one, andrew carnegie said, "he who dies with wealth dies in shame,"
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and someone once said, "he who gives while he lives also knows where it goes." >> there's no one quite so civic-minded in america. eli broad and his wife, edye, have become paparazzi pets because of the money they lavish on los angeles, so far, more than half a billion dollars. >> eli, over here now! >> who says money can't buy you love? >> and eli and your lovely wife, right here please. >> behold his footprint on los angeles. he's a driving force behind 16 major public institutions. in the center of downtown, the a cultural corridor, anchored by the magnificent disney hall, home of the los angeles philharmonic. [sprawling symphony music] ♪ next to it, the home of the los angeles opera, the museum of contemporary art, the high school for the performing arts, and the school of music. in greater los angeles, three
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scientific research centers, a theater, an art center, and another contemporary art museum. he puts his name on almost all of them. you said that your sense of being a wealthy man actually increased the more you gave money away. >> i think it's true. i don't feel i'm here to just maintain the status quo. i'm here to make things better or different. >> and you want the world to know about it by putting your name on all the things you do support. >> i don't keep it a secret, that's for sure, >> broad took us to grand avenue... this is quite a vista. which he plans to transform into a vibrant city center, rivaling new york's museum mile. disney hall, designed by frank gehry, almost did not get built. broad rescued the project by putting up his own money and putting the squeeze on fellow plutocrats. >> it's really become the symbol
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of our city. >> and then there's his own museum, the broad. this is a rendering. it's still a parking lot, but it will eventually hold his $1.6 billion art collection. how much is this going to cost? something approaching $1 billion? >> more. >> more? >> more. >> we were interrupted by an angeleno driving by. >> eli, buy the dodgers. buy the dodgers! >> "eli, buy the dodgers." you could be the george steinbrenner of los angeles? >> oh, no, no, no. i've got enough on my plate, >> broad runs his philanthropic foundation like a for-profit business, not a charity. charity, he says, is just writing checks. he practices what he calls venture philanthropy. >> we don't give it away. we invest it, and we want a return. remember, i started work as a cpa, so that gave me fiscal discipline in everything i did in business, and i guess some of it carries over to philanthropy,
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>> eli broad says, "i want results, and if you're not gonna show me results, i'm not gonna give you the money, and incidentally, after one year, if you don't show me results, i'm gonna stop funding you." >> new york mayor michael bloomberg, no mean philanthropist himself, admires broad's uncuddly approach and the $32 million he has given to new york schools. >> eli broad sets the standard. i think it's really being a role model for others. and they look at eli, and because of him, they get the ideas, "i'm going to be innovative and be philanthropic and do some other things." the leverage of eli broad is really quite amazing. >> amazing to the extent of almost $1/2 billion he's poured into improving public education. he spends even more on medical research. he teamed up with harvard and m.i.t. to create-- you guessed it-- the broad institute in cambridge, massachusetts. the broad is the world's leading genomic medicine institute. all discoveries are free,
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available to anyone. let me be rude and ask, how much have you put into this institute? >> $600 million total. >> broad grew up in detroit, the only child of immigrant shopkeepers. at 21, he married edye lawson. >> we borrowed $25,000 from her parents. >> and that $25,000 led ultimately to... >> a lot of money. >> in 1957, broad and a partner launched a no-frills home-building business. he was a millionaire by 27. he bought sun life insurance in 1971 and sold it in 1999 for $18 billion, and that's when he and edye decided to give most of it away. you're giving 75% of your wealth away. >> maybe more by the time it's over. >> or maybe more. you have two children. >> yes. >> what about them? >> they're well taken care of.
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they're different than their dad. >> different how? >> they don't have, frankly, the ambition to build a great business that i had. >> you've been open about admitting that you were not a great father. >> look when i started, it was 24-7 as they say, and i didn't spend enough time with the kids when they were growing up. i admit that. >> is that something you regret now? >> i do to some degree. we all go back and would do things over differently in our lives. [ticking] >> coming up... micromanaging philanthropy. >> eli's a control freak. i worked on a house for him. i didn't want to do it. >> why didn't you want to do it? >> i just told him i didn't like him. >> he said, "you'll learn to like me." >> eli broad, when 60 minutes on cnbc returns.
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>> eli broad is a self-made billionaire and one of america's most generous philanthropists, but as he told morley safer in april 2011, it's his passion for contemporary art that brings balance to his life. >> civilizations are not remembered by their business people or bankers or lawyers. they're remembered by the arts. >> he has collected over 2,000 works of art. unlike most collectors, almost all of broad's art is available for loan to museums. he loaned these pieces to the l.a. county museum of art and threw in a $50 million building to house them. one of his favorite artists is the irrepressible jeff koons.
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and here, a veritable cornucopia of koonsian genius. all, of course, painted and sculpted by hired craftsmen. koons is nothing if not worshipful of eli broad. >> you know, morley and eli, i just have to say standing here, what a fantastic location. i mean look at the natural light that is coming in on these works. it's just a tremendous gallery. >> and the balloon dog? what does it do to you? do you get some kind of emotional kick? >> i do. it makes me smile, it makes me feel good. it make me proud, and it especially makes me proud when i see young people and others looking at the work. and it introduces them to art in a way that no other work really does. >> and a piece that quite honestly mystifies me. michael jackson and a chimp, is it? >> michael jackson and bubbles.
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when i made this series, the banality series. >> series of banality? >> of images. i was trying to communicate to people that whatever you respond to, it's perfect. >> if you find koons' art-speak incomprehensible, well just wait. >> these are to make references to be in the womb a little bit, uh, before birth and prior to any kind of concept of death. >> do you totally get what he's talking about? >> not to the extent that jeff does, but i do listen and understand and learn from the artists, especially jeff, >> but not all artists are as respectful as jeff koons. take architect frank gehry. >> eli's a control freak. i worked on a house for him. i didn't want do it. >> why didn't you want to do it? >> i just told him i didn't like him. he said, "you'll learn to like me." >> broad fired gehry then built the house anyway using gehry's drawings. after two years and seven
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different models, i was impatient. i think he wanted to spend another year or two designing it, and i said, "frank, a work of art is never finished; it's only abandoned." >> they worked together again three years later to build disney hall, and once again, broad fired gehry. but he had to eat humble pie when the disney family insisted that he hire gehry back. >> we did it. we built it. we weren't friends. >> you've made your peace with him. at the same time, you've... >> i won't do a project for him. that's true. >> eli's middle name is "strings attached." eli "strings attached" broad. >> christopher knight, the art critic for the los angeles times, has been broad-watching for years. >> he's a first-generation, male, self-made gazillionaire, and people in that category typically believe--
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and with good evidence--that they know how to make something a success, and that can be a problem. >> with science, broad leaves the details to the experts, but when he dangles his money and his art in front of most major museums in l.a., he sees himself as the expert. and if they don't play, he won't pay. >> well, i am a perfectionist, and on things i know something about, i do get involved. >> we've talked to a number of people who say that you can turn into a bully. >> i don't think i'm a bully. but on the other hand, i'm not a potted plant either, >> no, i am sure you're not a potted plant. but these people who say some pretty unkind things about you will not talk publicly. they clearly are scared of you. >> i don't know why they're scared of me. >> well, because you're a rich guy and, therefore, a powerful guy, and you've got a temper. >> i've got strong views on things. >> but even your good friend
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frank gehry says, "eli can be a real pain in the ass," >> i can understand why frank could say that, because i am impatient, and patience has its limits. >> number one, it's his money, and you don't have to take it, so i'm sympathetic with that. eli is not a micromanager as much as he has ideas on how you can make society better, and he's devoting his own money to doing it. kind of hard to argue with-- that he doesn't have the right to do it, and you don't have to play the game if you don't want to. >> when you've got one 800-pound gorilla in the room, you're scared to death of the guy. everybody does want something from eli, and since he is the biggest game in town, nobody wants to alienate him. >> i just appreciate you all so much. >> just watch this crowd at the gala for the los angeles museum of contemporary art, which broad bailed out for $30 million. it was a scrum of culture vultures, fashion victims,
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and art victims, dealers and collectors, a night when skinniness was next only to godliness, when philanthropy and social climbing, self-aggrandizement and greed dissolved into one gigantic air kiss, all under the benevolent eye of that feared and admired dictator, eli broad. beyond the altruistic part of it, ego plays a part in this? >> oh, absolutely. >> a desire to be loved? >> a desire to be respected. i'm not doing these things to become the most popular person in the city. i wanna be the most respected person. >> we left him on the roof of his art foundation, this fully contented man, this master of all he surveys. what's this at the very end here? i know what this is. >> what is it? >> it's bigfoot. >> it is bigfoot. >> and who is the biggest foot
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in los angeles right now? >> i don't know. i don't think so. >> while eli broad continues his mission to make los angeles one of the world's cultural capitals, he hasn't forgotten his home state of michigan. in 2007, eli and his wife, edythe, pledged $26 million to build a contemporary art museum on the campus of michigan state university. designed by world-renowned architect zaha hadid and opened in 2012, the new museum is named-- you probably guessed it-- the eli and edythe broad art museum. [ticking] coming up: sony imports a ceo. >> do you ever just get out and walk around in tokyo? >> i do, though i don't shop. there's nothing my size. >> sir howard stringer, when 60 minutes on cnbc returns. building pass, corporate card, verizon 4g lte phone.
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>> in june 2005, sony appointed sir howard stringer its chairman and ceo. he was the first westerner to lead what is the epitome of japan incorporated. once a nimble innovator known for the coolest gadgets, sony had lost money in 2004 for the first time in a decade. stringer was given the job of turning the corporation around, and in january of 2006,
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six months ago into his new his job, sir howard told leslie stahl that not being japanese meant that he could shake the company up in ways his predecessors never could, but that's also what makes his job so hard. >> why did you take this job? >> i thought about taking this job for well over a week because i knew that the reason i got the job was because it was in financial difficulties, and so i knew that i would have to use every personal skill i have to persuade and cajole and convince that for the greater good of the company, we might have to do some tough things. >> like fire thousands of people, something sony's japanese executives, so entrenched in the tradition of jobs-for-life, could never do. in howard stringer, they saw a guy who would cut like hell but somehow be nice about it. you have announced a new restructuring plan where you're going to eliminate 10,000 jobs, 11 of 65 factories. have you announced which of the
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11 factories will be eliminated? >> some of them. we know what they are. we're all-- we're taking care of the employees before we take care of the press. >> so you know what they are, and you're just not going to tell us. >> i'm not gonna tell you, no. doesn't mean i'm not gonna do what i've announced i'm gonna do, but it does mean i'm gonna do it carefully. it's not as easy to be cavalier about people's jobs as one can be in the united states. >> but it's also not easy to run a company... >> [speaking japanese] >> where you're never quite sure what the heck people are saying. howard. [speaks japanese] >> yes, i haven't been to hawaii lately. >> didn't understand a word i said? >> no. no. >> that was japanese. not speaking the language is only the beginning. just standing up makes sir howard stand out: he's a foot taller than everyone. do you ever just get out and walk around in tokyo? >> i do, though i don't--
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i don't shop. there's nothing my size. >> the two weeks a month he spends in japan are filled with cultural disconnects. whether it's a shaky interpreter during a speech... >> sorry. >> that's all right. were you lost in translation too? >> or an upside-down business card exchange... >> oh, sorry. >> oh, wrong way. there you go. take one yourself. >> thank you very much. >> or a just-not-done peck on the cheek for a factory worker... >> [nervously giggling] >> it's clear that sony has never had a leader quite like howard stringer. sony long defined the leading edge in gadgetry: transistor radios in the '50s, trinitron tvs in the '60s... >> from sony, the one and only. >> and, in the '70s, the revolutionary walkman. >> the sony walkman is a tiny stereo cassette player with truly incredible sound. >> but if sony had the market cornered for 25 years, it took
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apple just months to steal it away. >> ♪ sony walkman >> i'm gonna show you something. >> oh. >> aha. ooh. >> yes. >> hurts. >> yeah. >> it hurts. this is the symbol-- a major symbol of where sony went off the tracks. what happened? >> there's no question that the ipod was a wakeup call for sony, and the answer is that steve jobs was smarter at software than we are. >> stringer says steve jobs came up with the ipod and itunes, a simple system for people to download music, while sony, worried about its record company, wasted precious time trying to figure out how to keep people from stealing songs. >> we tried to have a secure device, and that was a myth. >> that was a mistake. >> a mistake. sad for the music company, mind you. >> well, of course, apple didn't have a music company to worry about. sony had a music company. >> this is true.
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>> it's not just the ipod. samsung hurt them in flat-screen tvs. in videogames, microsoft's xbox challenged the playstation. one gets the feeling that sony is no longer the coolest. this is the coolest. >> you can take ipod and beat us over the head with it, but it's only one product, and we have 1,000 products. [ticking] >> coming up: the affable ax-wielder cuts down wall street. >> on the day of the announcement, you got a tepid, if not negative, response from wall street. >> why, i think the tepid response from wall street is because wall street now always wants more blood than you can possibly deliver. >> more stringer and sony when 60 minutes on cnbc returns. [ male announcer ] we did a febreze experiment
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♪ with new ways to work together, business works better. well hello, welcome to summer road trip, huh? uhuh yep uch let's find you a room. at, you'll always find the perfect hotel. because we only do hotels. wow. i like that. nice no. laugh... awe uch ooh, yeah hmm nice huh book it! oh boy call me... this summer, we're finding you the perfect place - plus giving you up to $100 at [ticking] >> when sir howard stringer was named chairman and ceo of sony in 2005, he was tasked with turning around japan's troubled giant. but as leslie stahl reported in january 2006, sony's bigness was one of its biggest problems. >> so all of a sudden, the entrepreneurial company, over 60 years, has become this big
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elephant. >> professor hirotaka takeuchi, is dean of one of japan's most prestigious business schools. >> i don't know if you heard steven jobs' speech, the title of which was "stay hungry, stay foolish.' >> and sony wasn't hungry anymore. >> as hungry or as foolish. >> the man sony is counting on to fix that--and foster unity and cooperation--is an unlikely choice, and not just because he's a sir rather than a samurai. you do not have the typical resume of a ceo. no mba. >> no. >> you're kind of a rare bird. >> "odd," i think, is probably the word. >> but you're very un-ceo-like. >> i don't have a financial background. i mean, i never-- i used to deliberately say that i never want to be in management. i still don't know how i got into management in the first place. >> born in wales, he lived in a house with no electricity then won a scholarship to a fancy boys'
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school in england and went on to college at oxford. you came to new york when you were, what, 20...? >> 2. >> 2. >> right. >> you were an englishman. you arrived in new york, you got a job, and you were drafted, and you went and fought for the united states in vietnam. >> i would use the word "fought" loosely. >> served. >> i served. >> you served. but you weren't an american citizen. >> nope. >> why did you do that? >> because i'm too stubborn. i was too stubborn to go back. it was my great adventure, coming over to america with $200 in my pocket and looking for work all on my own. >> after vietnam, the work he found was here at cbs news; in the '70s, producing documentaries, in the '80s, running the cbs evening news with dan rather, which he still says was his favorite job ever. but perhaps more defining is what happened when he was promoted to president of cbs news. in 1987, he oversaw the first layoffs in the company's history.
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he had to fire 200 colleagues and friends. yet this is the amazing thing. i don't know anybody who blamed you. now, how did you manage that? >> by communication. i did it myself. i mean, i didn't send a memo to somebody and say, "your job is over." and it was emotionally very draining, and it affected me. >> but he had to do it again, and on a much larger scale. stringer has actually worked for sony for the last eight years, winning notice and praise for turning around its ailing north american movie and music divisions. you eliminated 9,000 jobs here. and you have been dubbed by a newspaper "the affable ax-wielder." >> yes. >> so you have this reputation of being able to somehow manage these downsizings and maintain your reputation as a good guy. >> i hope i wasn't chosen because of my ax-wielding skills. you're usually offered a job
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because someone has not done a job well or there's a crisis. >> and, boy, is there a crisis now: how to restore sony's competitiveness in today's cutthroat global market. >> hello. >> he's already unified his workforce. what japanese executive does this: working the rope line at american-style town-hall meetings? and he never misses a chance to get out on the factory floor... >> how are you? >> to see and be seen. >> there are a lot of young people who say, "go on, shake it up more. do more! talk to me all the time." you know, "fight. get rid of those old-- that crust of management. go on, fight for it." >> motivating young workers is the easy part. firing some of them won't be, especially with some analysts saying the cutbacks don't go far enough. on the day of the announcement, you got a tepid, if not negative, response from wall street. >> i think that the tepid response from wall street is because wall street now always wants more blood than you can
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possibly deliver. >> still, sony simply has to change. profit margins for many consumer products have disappeared. it seems there's trouble wherever you look. >> for sony, they have always been a yokozuna. >> now, what does that mean? >> yokozuna is a sumo wrestler who's the highest grand champion. >> oh, okay. >> right? >> yeah, they've always been at the top. >> they've always been at the top. they've always been a rule maker rather than a rule breaker. now they have to become a rule breaker, and that's going to be tough to do. >> rule breaking means bold and innovative. and in electronics, they think they're on the way. their bravia flat-screen tv is a big hit. they hope the new digital walkman will be just as cool as the ipod, and a lot is also riding on the upcoming playstation 3. >> so you can see that there's a level of realism that's superior to anything else out there.
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>> to tout all his new products, stringer is in perpetual motion around the world... >> spielberg, sir, come in here! >> on the red carpet in hollywood, in black tie in new york, at a new sony facility in india. >> well, they have trumpets for me. i'll do anything you ask. >> what's your travel schedule for the next couple of days? >> well, i go to los angeles on sunday for a movie premiere. i go back to new york on monday night. i go to japan on saturday. >> oh. >> i then come back to london on thursday, back to new york on the following monday. >> you are in constant jet lag. >> yeah, actually, i am. seven hours' sleep is tantamount to a miracle. i celebrate it. stringer sees his wife, jennifer, a doctor, and their two children just a few days a month. now, your family is not in tokyo; it's back in england, in the countryside. >> yes. >> you said at the town meeting... >> right. >> at the factory the other day...
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>> i don't see my family very much. my family is you. >> and there was a sadness in your voice, actually. >> yes. yes, this is a tale repeated around the world with all of these globe-trotting business executives. you don't know quite what i'm inflicting on my children, and so i overcompensate when i'm around them, and i tend to walk in with bundles of sony devices as a sort of social bribery. >> "it's daddy. remember me?" if he's going to pay such an awful personal price, he doesn't want to feel like just another cost-cutting ceo, totally transforming the company to fit the model of american industry. sony, he says, deserves better. >> this is not a company on its last legs. this is a company with great traditions. i have to look after some of those traditions, because that's why the company was successful in the first place. and i'm not sure that leaping
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on board an american business model of ruthlessness and viciousness and counter-attacks all the time is a good thing necessarily for somebody else. and so, taking care of somebody else's culture is part of the joy and opportunity of this job. i have things to learn from the japanese, and not just the other way around. >> since our report first aired, sony and sir howard stringer have endured tumultuous times with mixed results. and 2011 was an especially tough year for both. the company posted its second biggest annual loss, it's playstation network was hacked, and it's wide-ranging operations were severely impacted by natural disasters in japan and in thailand. all that bad news was not good for sir howard stringer. in february 2012, it was announced that he would be replaced as sony's president and ceo but remain on as chairman. that's our edition of 60 minutes on cnbc.


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